Mum and dad to the rescue for struggling home buyers

Published on Saturday 22 March 2008 09:35

THREE-QUARTERS of first-time home buyers in Edinburgh are turning to the "bank of mum and dad" for financial help, according to a leading estate agent.

Warners said parental contributions towards a property were now "the norm" for first homes in the Capital.

The findings were revealed in Warners' 2007 property sales report, based on more than 1100 city sales by the firm last year.

Scott Brown, estate agency partner at Warners, said the growing number of single households, combined with soaring property prices, meant that even well-paid professionals were turning to their families for help.

He said:

"Salaries are failing to rise at the same rate as house prices, so even professionals on good incomes can struggle to obtain finance, especially if they are single.

"According to our data, in 2007 the majority of our first-time buyer clients had some form of family assistance."

Mr Brown said that Scotland's property prices were still the fastest growing in the UK, outstripping even London, and home sales in Edinburgh were showing no signs of a slowdown.

He added that a home was still the "most worthwhile investment you can make in Scotland".

However, Edinburgh North and Leith MP Mark Lazarowicz, said the fact that so many parents were having to shell out their hard-earned savings showed the "clear need" for more help for first-time buyers.

He said: "I'm not surprised at all that a lot of young professionals are having to ask their parents or family for help when buying their first home in Edinburgh.

"House prices have risen so much in the last few years that hardly any first-time buyers can afford to get on to the property ladder.

"I think this shows that there is a real need for the Scottish Government to do a lot more to help and encourage first-time buyers.

"There needs to be more financial support for young buyers, as well as shared equity schemes to help people get on to the property ladder. They should not have to rely on help from parents.

"It undermines the entire fabric of the city when young people and first-time buyers are struggling to purchase a property."

According to the report, Warners helped 547 single buyers purchase a property in Edinburgh last year – with the majority purchasing their first home.

Around 75 per cent of first-time buyers relied on some form of parental or family contribution towards their purchase.

'My father wanted to support me'

SUZANNE MACKIE had to rely on parental help to buy her first home, a three-bedroom flat in Broughton.

The 22-year-old PR executive, who moved to Edinburgh after studying politics in Aberdeen, bought the 235,000 flat after her father offered to pay 80 per cent of the total property cost.

She now rents out the spare bedrooms to help cover the mortgage and council tax on her property, which she paid around 50,000 towards.

However, she admits that there was "no way" she could have afforded it without help from her family.

She said: "There was no way I could afford a place of my own without my father's help.

"Fortunately, my dad wanted to support me getting on to the property ladder.

"I realise I'm fortunate to have that kind of help and it's not an option for everyone, so it's really important there are schemes to help first time buyers."

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